PERFORMANCE OF INDICES OVER 10YRS
[ ESG ]
– that needs to be protected as it is actually 99 per cent of the value .”
An uncomfortable truth Amid all the talk of above-average ESG scores correlating with higher returns , there is an elephant in the room : tobacco . It would be safe to assume a product that kills its customers and those around them doesn ’ t score particularly highly in any measure of social responsibility , yet it has been one of the best performing sectors of the past 20 years – data from FE Analytics shows the FTSE 350 Tobacco index has made more than 2,000 per cent over this time , more than 10 times the return of its mainstream counterpart . However , Gergel points out tobacco is a unique product , with advertising restrictions making it impossible to break the dominant oligopolies . “ You have slight declines in volume every year but prices are up because you ’ ve got an addictive product ,” he explains . “ That allows novel ways of cash generation , which are extraordinarily strong , plus you can consolidate within the industry .”
PERFORMANCE OF INDICES OVER 10YRS
FTSE4Good US ( 268.54 %) FTSE USA ( 243.45 %) FTSE4Good UK ( 94.25 %) FTSE4Good Europe ( 86.62 %)
FTSE All Share ( 90.89 %)
FTSE Developed Europe ( 74.38 %)
300 % |
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250 % |
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200 % |
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150 % |
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100 % |
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50 % |
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0 % |
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-50 %
May08
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Source : FE Analytics trustnet . com